(The LVMI is a research and educational center devoted to classical liberalism -- often known as libertarianism -- and the Austrian School of economics. Grounded in the work of economists Ludwig von Mises and Murray N. Rothbard, LVMI seeks to advance the Austrian School of economics and promote the market economy, private property, sound money and peaceful international relations, while opposing government intervention as economically and socially destructive.)

Let the Market Save Lives

By Douglas Carey

On Nov. 1, 1999, at the age of 45, Chicago Bears football great Walter Payton died while waiting for a new liver to replace the one in his body that had been ravaged by a rare disease. Living in Chicago, I saw many people grieve and express sorrow for the fallen hero, who was truly one of the most stand-up athletes in professional sports.

As most citizens of this town felt sadness, however, I felt outrage. I was outraged that somebody could die waiting helplessly for a donor organ that would never surface. I was outraged that this happens every day to people in all walks of life.

There is one reason and one reason only that Walter Payton and many others are not alive today, and that is the fact that is illegal for anybody to pay for or receive money for organs. Congress outlawed such compensation in 1984 by passing the National Organ Transplant Act.

Currently, an estimated 79,000 people are awaiting organ transplants that will potentially save their lives. Every day, on average, 16 of these men, women, and children die waiting for their transplant. Sadly, the simple, lifesaving solution to this tragedy has been deemed illegal for eighteen years now. That solution is to allow a free market for organs and body parts.

Like any other good or service that is in demand, a market for body organs would thrive and efficiently allocate organs to those most in need. Currently, from a supply standpoint, most organ donation decisions are made at the Department of Motor Vehicles, where you can check whether or not you want to donate your organs in the case of a fatal car accident. There is also an organ/tissue donor card you can fill out, informing your family of the desire to be a donor in the event of death. Still, there remains a massive shortage of organs.

Why is this? It's simple. Neither donors nor their families are being paid one penny. In fact, it is a perverse fact that in many states, if a person changes his or her mind and decides to be a donor later, he or she must actually pay the DMV a fee.

If there were a free market for organs, it is an absolute certainty that companies would sprout up to offer payment to the person's family (or anybody else that person designated) for his or her organs in the event of a fatal accident. This would immediately increase the supply of organs and would, therefore, save countless lives.

If a free market prevailed, there would be no shortage of much-needed organs (which today equals death for some), as supply and demand would set the price that clears the market. It's the ultimate win-win situation, with money going to the deceased person's beneficiaries and, at the same time, many lives being saved.

It appears that there may finally be light at the end of the tunnel, as the American Medical Association has begun a pilot program to test the effects of payment for organ donations -- as if any such "tests" are needed. Any Economics 101 student could tell you that in a free-market setting, the supply of donated organs will rise, which will thus lead to fewer deaths. In any event, it is widely known that if the AMA endorses payment for organs, Congress will vote in favor of it.

The fact that payment for body parts is illegal begs the question: Who could support such a ban? For one, the organization that coordinates transplants for the federal government.

This organization, the United Network for Organ Sharing, or UNOS, is like many companies that thrive simply due to government interference. However, its gall is unsurpassed when it rationalizes the deaths of 5,800 people a year.

A spokesman for the group stated, "Donor families have told us it's something they see as a wonderful legacy. Because folks see it as a gift, they would really be deterred by putting a financial incentive on it."

This may be one of the most ignorant, backward-thinking statements ever uttered. This is akin to saying that a supply curve is downward sloping, or in other words, that as the price of a good falls, supply rises. This would be the first time in history that this nonsensicality would have been true. But the laws of economics have not been repealed, and the supply curve is most definitely upward sloping, even for the market in human organs.

We can only hope that the AMA carries through with its actions and advises not only the legalization of payment for cadaver organs, but payment for organs or organ parts from people who are alive as well.

Every year, hundreds of people donate a kidney or a part of their liver to a family member or friend who is in dire need. If payment were allowed, we would see more of this type of activity -- and not just from acquaintances -- thus saving many lives.

How there can even be a debate on this subject is beyond rational thought. The sooner the AMA voices its support for a free market in lifesaving organs, the sooner people will stop dying needlessly, waiting in vain for a lifesaving body part that will never appear.

As President Bush travels to East Asia to hold summit meetings with the leaders of Japan, South Korea, and China, he does so against a backdrop of dramatically improved U.S.-Chinese relations. Tensions between the two countries have eased considerably since the initial period of the Bush presidency.

Various commentators around the world have noted Beijing's surprisingly mild reaction to revelations that electronic listening devices had been planted on President Jiang Zemin's American-built airplane. Even though Chinese officials implied that the bugging was a U.S. intelligence operation, there were no official charges of spying nor did the state-controlled media launch an anti-U.S. propaganda campaign. Indeed, the media virtually ignored the incident.

That reaction was in sharp contrast to the shrill statements from Chinese leaders and the massive propaganda offensive that followed the collision between a U.S. spy plane and a Chinese fighter jet in April 2001. The reasons for that difference suggest a number of things about China's internal politics and foreign policy.

Indeed, the April 2001 episode was the last time that Beijing adopted an openly confrontational policy toward Washington. Even before the recent bugging incident, Chinese leaders had responded with surprising restraint to several U.S. actions that might have been expected to provoke harsh responses.

When the Bush administration announced the most extensive arms sale package in years to Taiwan in the spring of 2001, Beijing expressed bland, perfunctory protests. The Chinese government actually worked with the United States to gain cooperation from Beijing's long-time ally, Pakistan, in the war against Osama bin Laden's al Qaida terrorist network and the Taliban government in Afghanistan -- despite the possibility of a long-term U.S. military presence in Pakistan.

And when the United States announced its withdrawal from the Anti-Ballistic Missile Treaty in late 2001, Beijing's protests were decidedly muted, even though a U.S. missile defense system would erode the credibility of China's small nuclear deterrent.

It is inherently difficult to speculate about the motives for policy initiatives in a secretive, authoritarian political system like that of China. Nevertheless, several factors appear to account for Beijing's unusual restraint in recent months.

First, the Chinese Communist Party elite wants to avoid any international controversy before the upcoming Party congress and the formal transfer of power from Jiang to heir apparent Hu Jintao. It is reasonable to assume that members of the elite are currently preoccupied with maneuvering for advantage during the leadership transition.

Second, China's leaders desperately need to preserve and expand the economic relationship with the United States. The global economic slowdown, and especially the deepening recession in East Asia, has made the U.S. market more crucial than ever. China cannot let quarrels over other matters jeopardize access to that market.

Without a continued expansion of trade with the United States, it would be difficult for Beijing to sustain economic growth rates in the high single digits. Yet if that growth rate declines, the already alarming number of unemployed Chinese in the major cities could burgeon rapidly and pose a danger to the regime.

Finally, Chinese leaders are increasingly alarmed at the signs of a growing rapprochement between the United States and China's traditional rival, India. Beijing worries (with good reason) about the possible emergence of a U.S.-Indian "strategic partnership" directed against China. The Chinese response to the warming relations between Washington and New Delhi has been to try to improve China's own relations with both capitals.

At the height of the Cold War, U.S. Secretary of State Henry Kissinger said that it always ought to be an objective of the United States to have closer relations with both Moscow and Beijing than they had with each other. China's leaders seem to have made it their goal to have closer relations with both the United States and India than those two countries have with each other.

It is hard to predict how long China's accommodating policy toward the United States will last. Once the leadership transition takes place, we may see a more assertive, if not confrontational, policy reemerge. Yet there is reason to think that this will not occur anytime soon.

The other two factors encouraging a conciliatory policy by Beijing will still be present even after Hu's leadership team replaces Jiang's. If that is the case, the improvement in relations between China and the United States may persist for an extended period of time.

(Ted Galen Carpenter is vice president for defense and foreign policy studies at the Cato Institute and is the author or editor of 13 books on international affairs.)

The Hoover Institution

By Diane Ravitch

For many years, educators and policymakers at state and national levels have been trying to persuade young people to finish high school. Dropping out without a diploma, it is widely recognized, is associated with lower wages and scant economic prospects over one's lifetime. Consequently, we have regularly seen advertising campaigns by public officials and private industry encouraging teenagers to stay in school and improve their life chances.

Yet the U.S. Department of Transportation recently indicated that a high school diploma is not especially important. Last fall, when Congress passed legislation to improve airport security, it federalized the nation's 28,000 screeners of passengers and baggage. The legislation directed the Federal Aviation Administration to hire, train, test, and deploy those responsible for screening access to our nation's airplanes.

The public assumed that the purpose of this legislation was to heighten security. At first, the FAA said that it would require a high school diploma for those jobs. But when it was discovered that some 7,000 current airport screeners do not have a high school diploma, the FAA reversed course and decided that it would accept a year of relevant work experience in lieu of a high school degree.

In other words, the current work force, which allowed massive security lapses on Sept. 11, is good enough. Even though its starting salaries will be doubled (to an average of $30,000), the workforce will remain unchanged and its qualifications will not be increased.

There are two problems here:

(1) The legislation is a sham if it does not raise minimal standards for those who hold these sensitive jobs;

(2) The FAA's decision sends a message to students that it is not necessary to have a high school diploma to get a good job, even one that is crucial to the nation's security.

Why should screeners have a high school diploma? Teachers and principals will tell you that school completion indicates a certain level of persistence, self-discipline, literacy and accomplishment. Young people who lack the motivation to complete their high school studies are not the best pool from which to select those who are expected to read passengers' faces and behavior, to assess the contents of their bags, and to do so quickly and accurately.

How can teachers persuade their students to stay in school and get their diploma if the FAA says that the degree doesn't matter? To his credit, Sen. Charles Schumer, D-N.Y., has complained about this unfortunate decision.

Members of the American public were led to believe that the federalization of the work force would raise standards for those entrusted with their safety. The FAA's willingness to suspend educational standards for one-quarter of airport screeners sends a negative message not only to airline passengers but also to the nation's students and their teachers.

(Diane Ravitch is a distinguished visiting fellow at the Hoover Institution, a member of the Koret Task Force on K-12 Education, a senior fellow at the Brookings Institution where she holds the Brown Chair in Education Policy, a member of the board of the New America Foundation, and a research professor at New York University.)

Progress and Freedom Foundation

(PFF studies the digital revolution and its implications for public policy. P&FF is ideologically diverse and politically non-partisan, and its work focuses heavily on communications, computing and telecommunications.)

By the Progress and Freedom Foundation

Less Regulation Would Spur Broadband Growth: New Paper Provides Background for Tauzin-Dingell Debate

The best way to achieve the goal of more rapid growth in the telecommunications sector is to reduce regulations that impede it. That is the conclusion reached by most speakers at a recent Progress & Freedom Foundation seminar, "Broadband Regulation: Should Congress Act?"

The remarks of the four participants representing varied viewpoints, as well as those of Randolph J. May and Jeffrey A. Eisenach of the Foundation, are found in a paper released Friday.

"On the key question discussed at the session, there was substantial -- if not unanimous -- agreement that less regulation would spur investment in new broadband facilities," said May, who is Senior Fellow and Director of Communications Policy Studies.

C. Lincoln Hoewing of Verizon highlighted the "regulatory advantage" held by the cable industry in broadband development. "They don't have regulation, requirements for providing access or restrictions on pricing," he said. "Basically, they're able to do packaging, bundling and deployment in ways that fit the market the way they see it." He said a major concern of his sector is investing in broadband, only to have to share it with competitors.

John D. Windhausen Jr., who heads the Association of Local Telephone Services, holds a different view. Unlike the rest of the panel, he does not support deregulatory legislation by Congressmen Tauzin and Dingell. He fears it would harm the interests of new entrants.

"We are not yet in a position where we can build a ubiquitous local phone network to duplicate the network built by the Bell companies," he said. "We have to interconnect with their network in order to complete our phone calls."

Peter Pitsch of Intel addressed the economics of deployment decisions in light of current regulations. "Look at the relevant market and competition analysis, and you'll conclude, both in terms of deployment and competition, that sound public policy would not require unbundling for the new fiber overlay network."

Thomas Hazlett of The Manhattan Institute cited a new movement toward deregulation that may be replacing the tactic of promoting regulations to hobble one's competitors in other sectors. "A great movement within the ILEC world has seen (them) move away from promoting open access on their cable rivals and move toward a pro-deregulatory stance themselves," he said.

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